The Bureau of Labor Statistics (BLS)released a terrific non-farm payroll report on Friday. The report shows a net gain of 321,000 jobs for November – the best result for the entire year. It beat the consensus estimate of 230,000 new jobs by almost 90,000, the biggest “beat” for the year. (See graph).  And after a long series of preliminary employment reports that have been revised down when the final numbers were tallied, both September and October were revised up – 15,000 higher for September and 30,000 higher for October. Break out the champagne! Happy days are here again.

And yet …

There’s a lot not to like about the BLS jobs reports. The BLS actually conducts two surveys every month to arrive at an estimate of employment in the U.S. The “establishment” survey is a monthly non-random sampling of payroll tax filings by about 160,000 U.S. corporations and government agencies. It measures “jobs” and not the number of people employed, because some people have more than one job.

The “household” survey is a statistically-designed sampling of roughly 50,000 households. It measures the number of people who have jobs, including some, like farm workers and the self-employed, who don’t show up in the establishment survey.

The problem is that the two surveys rarely agree. This month, for example, the establishment survey says there were 321,000 new jobs added to the U.S. economy. The household survey says that the net increase was only an additional 4,000 people who found work, while the number unemployed rose by 115,000.

Who’s Right? Who Cares!

The market doesn’t much care for such fine distinctions. The number in the headlines was 321,000, about a third more than expected, and the SPX inched up to a new all-time high at 2079.00 on Friday, before settling back to close at 2076.00, a very modest gain of 7.81 points for the week.

Perhaps we have nothing to fear but fear itself, as a former president once said in the midst of a fearsome depression, and apart from the queasiness induced by the inexorable climb to new highs, week after week, there is little in the chart to suggest a retreat.

Long-term, the market is over-bought, but over-bought markets go up all the time. Short-term, there may be some profit taking to manage end-of-year tax obligations. But that should not have a substantial impact on this roaring bear.

Our target for 2014 was 2080, and we’re there. Now we see more gains into the first quarter of 2015. We’re in wave 3 of the Elliott Wave count with a target around 2130-2170. We could be there by March, maybe sooner.

How to Trade It

We are short-term traders and our preferred vehicle is the S&P500 e-mini futures, current contract ESZ4. This is rollover week, when futures traders switch to the next contract, and the trading will be a little disrupted near the end of the week.

Israel bombed Syria over the weekend, the Japanese market tanked, and yet another banker was found dead in mysterious circumstances in Belgium, bringing to 51 the number of bankers who have died unexpectedly in 2014

How this will affect the market is anybody’s guess. Our guess is that 2071 will be a key line for short-term traders early in the week, the place where prices fluctuate back and forth.

In the early sessions, we may see the ES move up to the 2084.50-89.50 zone. We will short it there. That will probably be followed by a reversal to Friday’s low around 2068.50-70.50. We will be long there.

If the ES goes down below 2071 first ,we will look for support and go long above 2060.50 or a bit lower above 2056.50.

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